Wednesday, August 1, 2007

Jackson County Finances

The Audit Report was released for Jackson County on July 31 -- it had been due on June 30. You may recall that we were told that the County was in the red on Jan. 1, 2007, when 45 merit employees (including the entire environmental program) were terminated. The Audit Report shows on p. 23 that as of 12/31/2006, the General Fund had a balance of $12.56 Million, just as former County Executive Katheryn Shields had said it would.

This is not to say that there is no cause for concern. Remember: For 2005-6 then County Executive Shields recommended employee raises that totaled $4.5 Million (and would have a "forward cost" of $3 Million per year.) The Legislature (approving & matching the raises given by the Prosecutor to his professional and clerical staff) authorized raises totaling $12.5 Million (with an annual "forward cost" of $6 Million per year therafter.)

Because it is primarily a service-provider, a very large percentage of the County's budget is in salaries. And County revenues grow very slowly. Over the first ten years as Exec, Shields had done salary studies, and steadily raised the salaries of County employees to be comparable to private business -- but was always careful that the cost not exceed the increase in County revenues. That is the policy her 2005-6 recommendations would have continued.

Unfortunately, the slow growth in County revenues probably cannot absorb the massive expendatures resulting from the Legislature's 2005-6 salary actions. That means the surpluses in County funds painfully accumulated over the years can be quickly exhausted.

If Jackson County is in financial trouble, the painful truth is that those now in charge are the ones who created the problem -- over Shields' objections. It is important not to amend history on this.


Anonymous said...

Yes, Philbo, we all get the act. You guys are, once again, the victims of a vast conspiracy and everyone else is to blame.

Dan Ryan said...

Just because you're paranoid doesn't mean they're not out to get you. Phil seems to make a fairly straightforward factual case, anonymous. I don't personally know very much about the validity of his statements about the Jackson County budget, but I have to say that his fact-based presentation is a whole lot more persuasive than your sarcasm-based presentation.

Anonymous said...

Dan, give me an f-in break. For Phil/Kathryn to come on here and claim that they share NO BLAME for the County's budget mess is absurd. But, here are some facts for you:

1. Shields spent over $12,000,000 for no-bid personal service contracts for mainly things like "consultants" or items not needed in 04-06;

2. Shields left over $3.5 million in outstanidng bills, and required maintenance for the new administration in January;

3. Shields, in a game of what she saw as politcal tit-for-tat, gave out a 3% COLA to ALL county employees, after Sanders AND the unions asked her not to do;

4. After Sanders gave raises to his staff (all of which were paid for by money already either appropriated to his budget [i.e. -savings realized], or independent revenue sources [i.e. - revenue sources provided to the prosecutor by Jeff City for expenses], she decided to give the ENTIRE COUNTY an additional 6% raises, thus breaking the bank. Understand this, the prosecutors office was the 2nd lowest paid prosecutors office in Missouri AFTER the raises were given. However, Shields own salary consultant, Gayle Merriweather, said the other County employess were at market or slightly better. Thus, Shields et al did her pay raise bit, not based upon sound public policy, but upon politcal gamesmanship (go figure that one);

5. The mural of her highness exhibits a mindset that existed which was abohrent to sound budget policies.

6. Shields underfunded the employee retirement account from 03-06 by $55 MILLION DOLLARS, left a $20 MILLION DOLLAR cash flow shortfall, and left the budget $15 MILLION OUT OF BALANCE; The total, $90 million dollars. Now, how exactly does $450,000 in prosecuotr pay raises = $90, or even $10 million.

7. I could write countless other things, but I have a life and am not going to waste any more of my time arguing what is such an obvious point.

Yes, I understand, up is down, left is right, black is white. The person responsible for county's budget for the last 12 years (Shields), bears no responsiblity for the budget of the last 12 years. I understand the spin, but I also have a brain and a calculator.

Dr. Alex said...

LOL, game-set-match ANON. BTW, Phil and his team peddled this stuff during the election of last year as well, and we see how that went for them.

Dan Ryan said...

There you go, anonymous! See, you make a much more compelling case when you present evidence instead of just sarcasm. My dog's not in this fight - I just think anonymous commenters who provide nothing but sarcasm are useless to a discussion.

Anonymous said...

OK Dan, I get your previous point now. Within the CCP, I have just been witness to too many of Phil/Kathryn's fanciful rages to let such clear BS slide. We supported Sanders as an organization in 04 and 06, and he needs our support now more than ever as the county heads into rough seas. I just don't want us to start eating our own, especially when it would be for no good reason.

Dan Ryan said...

In other words, anonymous, you were giving me credit for playing dumb, when, in fact, I wasn't playing.

I'm kind of flattered, I think . . .

craig said...

Many other points to be made. While I agree with 'anonymous' and understand his/her not wanting to type forever, I will bring a couple other things to light. Jackson County has not had a true COLA raise since at least January of 2000,i.e. raising starting salaries. The 3% merit raises don't even touch the CPI (Consumer Price Index). And I don't care what her overpaid consultant Merriweather said, salaries were not even close to compatable areas. And, if Kathy was so against these raises, why did she send out a County wide email stating how hard she fought to get them.
Now, the bigger questions. Why didn't anyone on the CCP call out Phil on his blatantly false claims? Are you really for progress, or for Phil's regressive political style. And why isn't anyone calling out the County Legislature (Rizzo, Waits, Tarwater, Arbanas, Spence, and Burnett) for failing to do their job? Maybe because the CCP backed most of them? Just curious.

Anonymous said...

Actually, Phil is correct about page 23 reflecting a surplus. As of December 31, the general fund had an undesignated amount or surplus of a little over $7 million. The remaining $4 million was reserved or designated for certain things but had not been used as of December 31. This is the same fund that is supposedly now in the red. Where did this money go? Where is a list of who was owed money from the general fund? And, how much did they total?

Furthermore, the pension plan has a shortfall of over $50 million dollars. Why hasn't anyone brought up the fact that the legisative body negotiated a huge pension increase for themselves two years ago and failed to do the same for the county employees? How can the legislative body continue to act clueless and get away with it? How long have they been there?

I am going to have to agree with Craig on his comment: "And why isn't anyone calling out the County Legislature (Rizzo, Waits, Tarwater, Arbanas, Spence, and Burnett) for failing to do their job? Maybe because the CCP backed most of them?"

What happened to the part of "county reform" in which the CCP originally stood for?

handringer said...

Dan, have you ever met a failed politician that you did not need to fawn over as soon as they get in trouble?

Between Funk&Gloria and Kat&Phil, you remind me of the apologist Dennis Hopper character in Apocalypse Now:

"Oh you're looking at the heads, man. Well he gets carried away sometimes. He is a Ef-ing genius, man."

To believe that anything that comes out of the Phil&Kat camp at this point is "straightforward and factual" begs the question: Dan, you don't have a cement concession in Sibley do you?

Dan Ryan said...

Handringer -

Looks-wise, I think I resemble a buff Matt Damon much more than Dennis Hopper. Regardless, I've looked over what I've written, and I don't see where I've "fawned" over Phil, unless pointing out that evidence is more persuasive than anonymous sarcasm somehow constitutes fawning. I'm not sure what I did to earn your hostility . . . Having a bad Monday?

Phil Cardarella said...

Geez, you introduce one little fact – like the actual $12.56 M.General Fund balance as reported in the actual Audit Report of 2006 – and things sure get snippy! But, as (Not Terribly)1st Anonymous (probably writing on County time and computer at 1:50 on Friday) well knows, half truths are the best lies. Let’s shine a bit of light:

1. “Shields spent over $12M for no-bid personal services contracts.” Half-true. In her 12 years, Shields – like every County Exec before her – issued PROFESSIONAL service contracts as required by the Charter. Professional Services – engineers, architects, attorneys – were excluded from the bidding process by statute, but Shields had Public Works create a very open, very public pre-qualification process to insure qualified professionals.

All funds for such contracts were appropriated by the Legislature. For all this BS about County contracts, no one has ever pointed out a single such contract given to anyone not qualified, or any contract paid unless the work specified was done.

2. Since every year has a carry-over of bills this is meaningless without specifics. However, checking p. 23 of the Audit does seem to indicate that “Accounts Payable” are deducted, leaving the $12.56 M balance.

3 & 4 The history of the raises is a long one, and it is important to differentiate between the Prosecutor’s professional and clerical staff members.

When Claire was an assistant prosecutor, she was one of 30 assistant prosecutors – and five of them were part-time. Under her, the number of assistant prosecutor positions rose to @ 70, most of them low-paid and entry level for a lawyers getting training and moving into private practice. When the Firefighters organized the prosecutors – under Beaird – the agreement was to raise professional pay levels through attrition and unfilled slots. (The issue has never been whether assistant prosecutors should be paid appropriately, but how many assistants are actually needed. Somehow, other counties make due with far fewer assistant prosecutors per capita and try more jury trials per prosecutor. That is not an issue of labor, but of management.)

Bob Beaird’s successor chose to negotiate a long-term contract with Local 42 (without input from the Executive) that gave large across-the-board increases to all assistant prosecutors – with all 70 positions to be filled. (Again, the issue is not what an individual assistant is paid, but the overall cost of the total professional staff.) Shields opposed the plan, but the Legislature approved it over her objections. (It is somewhat disingenuous to maintain that these raises cost nothing because they came from “money already appropriated to his budget” since all payments can only be made by such an appropriation – although he did make a one-time payment for a part of raises from a State expense fund in summer of 2006 when additional funds could not be transferred from the General Fund without Shields’ consent.)

Anonymous insists on lumping the Prosecutor’s office raises together, but even raises for 70 professional staff members did not create the larger problem. It was the Prosecutor’s insistence on negotiating separately, without concern for the County’s overall budget. Negotiating a 6% annual raise with the Carpenters Union for the prosecutors’ non-professional staff created the chaos. After all, it is impossible to argue rationally that a clerk working for the Prosecutor should receive a raise double or triple that given to a clerk working for Assessment or the Courts. 6% raises for @120 non-professional staff created the pressure for the same for 1600 other County employees.

Historically, the County had given raises as the increase in revenue and efficiency could sustain. It was rare for the raise pool to exceed 3%. Even then, Shields favored performance-based increases for employees – within the overall allocated budget – and generally opposed COLAs. Moreover, the County had traditionally given raises on anniversary dates, reducing the first-year budget impact of the raises. With an agreement by the Prosecutor to give his clerical staff 6% annually, the Legislature was faced with a choice of rejecting the agreement negotiated with Carpenters Union or insulting the other County workers by giving them lower raises.

Shields recommended raises for 2005-6 that would have cost $4.5 M., with a forward cost of $3 m. per year. She warned that anything higher would ultimately result in layoffs and cuts in services. In order to honor the Prosecutor’s negotiations – and treat the other employees equally – the Legislature authorized raises that cost $12.5 M. in 2005-6 and with a $6 M.. forward cost. It was done with a veto-proof majority. The math is simple here, folks. And the history is clear.

5. Have you noticed that Shields is one of 39 county employees – several of whom are from the Prosecutor’s staff – on the mural? Or that it was paid for by bond funds (not available for General Fund expenses) for renovating the historic downtown courthouse – a job it took Shields years to accomplish?

By the way, the only full-time employee Jackson County had in the past 12 years who did not ever receive a raise was Katheryn Shields.

6. As Bob Spence pointed out to Henry Rizzo – twice – last Monday, the Legislature has been warned repeatedly about possible underfunding of the retirement system. As for the other sillinesses, just look at the audit report and the fund balances as of 1/1/07.

Look, even those of us who did not support the current Executive wish the County well. But none of the problems facing the County will be cured by amending history. On the contrary, until those who created the fiasco recognize its causes, there is no possibility of cure.

Mr. Anon said...

The Shiels/Phil continued misinfromation/spin is so full of holes and pure BS, that I get tired just thinking of the volumes I could write refuting it. However, there is a reason Shields got less than 1% of the vote, and both of them are indicted for felonious fraud. Yep, fraud. They are sorta like stray dogs, if you feed them they'll keep coming back, ignore them and they hopefully go away. The sooner those two go away, the better off we'll all be.

Anonymous said...

LOL, Mr Anon. That was some good stuff.

Dan Ryan said...

No, really, Anonymous and Mr. Anon, that was not good stuff, and it's nothing to LOL about. It's mean, nasty and cowardly.

There is plenty of room for debate about the Shields administration, and Phil certainly opened the door with his analytical defense of his view of history. A few commenters have raised factual issues, and the rest of us have read and learned a bit more about both sides.

But, what is accomplished by comparing people to stray dogs? And, what is accomplished by a comment expressing approval of such behavior?

I don't ask these questions because I'm trying to defend Phil from hurtful words. He's a big boy, and doesn't need my defense. I'm asking because I'm hoping you'll think about the questions. What do you think you are accomplishing with junk like that? Do you believe that your comments are persuasive - that somebody will weigh the factual arguments and then decide that, since someone called Phil a stray dog, they are factually wrong? Is that how you think it should work, or does work?

Are you just venting some anger at Phil, or at the world?

I'm eager to read factual, civil discourse. Phil's shown himself capable of it, and so have some other commenters - even some of the anonymous ones. Care to participate?

Phil Cardarella said...

My, my. Didn't we hit a nerve? Facts are stubborn things. Sure didn't take long for our little ad hominem to raise its ugly head. Such arguments are actually quite flattering, seeking to silence through insult and intimidation.

One of the ways that Mr Putin has been so successful in stifling dissent in Russia has been to use the "criminal justice system" to charge & imprison his most effective opponents. It has a bit of a dampening effect on the opposition, and leaves no traces of radioactivity. Since a cooperative press follows the party line, those charged are discredited and effectively silenced, regardless of their innocence.

Since 80+% of local officials investigated or charged by the US since 1/20/01 are Democrats -- a 10,000 to 1 chance occurance -- perhaps Vladimir and W spent part of their time together in Maine comparing notes. Perhaps Alberto & Bradley can participate in an exchange program with some ex-KGB boys.

Lloyd Bentsen, 1988 said...

The operational key to understanding the Shields method of accounting:

"You know, if you let me write $200 billion worth of hot checks every year, I could give you an illusion of prosperity, too."

craig said...

WOW, where do I start?
1. "no one has ever pointed out a single such contract given to anyone not qualified". No, but a former County Exec (Waris) is currently serving Federal Probation for lying to the FBI regarding no bid contracts that involved Shields.
2. "and generally opposed COLAs". True, and because of that the starting salary for Jackson County employees has been effectively reduced (by taking into consideration the Consumer Price Index) by 12-15%.
3. "Since 80+% of local officials investigated or charged by the US since 1/20/01 are Democrats". Depending on your definintion of local, I will use Jackson County, more than 80% of the officials are Democrats.
4. " Have you noticed that Shields is one of 39 county employees – several of whom are from the Prosecutor’s staff – on the mural?" I can't say anything civil about that comment so I will leave it alone.
While Phil is throwing around big numbers, most of this is grade school math. And Dan, why don't you call out Phil for claiming that anonymous is blogging from a county computer. It may or may not be true, but that is just a spiteful thing to say regarding the former employees of his wife. With that attitude towards employees is it any wonder that the turnover rate in some Departments of Jackson County is between 30-40% annually?

George said...

Out of all the grand and glorious statements made here by Mr. Phil Cardarella, this one is perhaps the most "fact-based" (nod to dan ryan) and potentially revealling I have ever seen:

"half truths are the best lies".

Think about that for a minute, then factor in all of the times Phil/Katheryn/Fisher and their ilk have been caught twisting and intentionally misstating figures to fit their latest cover-up agenda, and it seems to prove another old maxim:

"figures don't lie, but liars figure".

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